In a world where Apple is perceived to lead the way in innovative gadgetry, the technology inside its latest gizmo is nothing but new.

And don't be fooled by the name of the new family member either, the Apple TV isn't a PVR that's about to give Sky+ a run for its time-shifting money.

In fact, the Apple TV is a media streaming device that will play photos, music and movies from a computer, on a TV in another room of the house. Hardly headline grabbing.

However, it is the first streaming device (bar the audio-only Apple Airport Express) that integrates fully with iTunes. So, for anyone that's got a hefty collection of media catalogued within Apple's propriety software, this is the first device that will liberate it all.

The admittedly great-looking Apple TV looks like a flattened version of the Mac Mini. Designed to complement other under-telly entertainment devices, it has HDMI and component outputs to connect to HD-ready televisions. This is great for those with high-definition TVs and will certainly make images look sharp and detailed, however, it instantly segregates anyone who's yet to upgrade to a HDTV. In other words, it won't work with older televisions. It doesn't come with video cables, either, which is a bit cheeky.

Audio is better equipped with both digital and analog outputs providing connections to most types of stereo amplifier. However, like video, you'll have to supply your own audio cables.

For the Apple TV to stream content from one place to another, it will need to be connected to a home network. There's a network socket on the back for plugging into a router and built-in wireless networking that supports all the standards, including 802.11n, which is faster, more secure and has greater range than its predecessors. You'll need a compatible 802.11n router, though.

The Apple TV is compatible with both Mac and Windows PCs and, like most Apple products, is ludicrously easy to set up. If connecting wirelessly, just use the supplied remote control to tap in your network security password. Once associated to the network, additional computers can be added very simply. Any media that's in iTunes will then appear in the great-looking menu system, neatly categorised and ready to be streamed.

It's also possible to store media on the Apple TV itself, meaning a computer doesn't have to be connected to get at content. Apple TV appears within iTunes and, just like an iPod, allows you to drag and drop media to its 40Gb hard disk. This means a collection of favourite music, photos and video is always to hand. It doesn’t support paid-for music that wasn't downloaded through iTunes, though.

Sound quality is very good and photo slideshows are terrifically impressive. However, it's the lack of video compatibility that disappoints us. Like iTunes itself, there's no support for DivX (the preferred format of downloaders) or WMV (used by Sky By Broadband and Channel 4's on-demand service 4OD), which will unquestionably deter some.

What's more, the only video currently available to download within the iTunes store is designed for iPods, which means a 4:3 radio (not widescreen) and a maximum resolution of 640 x 480, which just doesn't look good on big flat-screen TVs.

However, create your own photo slideshow or home movie using Apple's iMovie software and the crisp picture quality (1280 by 720 pixels) is plain to see, which suggests the Apple TV's potential once decent content is readily available.

There's no doubt that the Apple TV is a powerful piece of technology that's foolproof to use. However, right now, there just isn't enough iTunes video content to really take advantage of its streaming prowess. With this in mind, the £200 price seems awfully expensive and makes it hard to recommend.

Vista compatible: Yes